What Fed “Independence” Really Means

A recent undercover video interview with a Fed economist by a Daily Caller reporter contains explosive revelations about the profoundly anti-democratic doings of the Fed.    In the video, Federal Reserve principal economist Aurel Hizmo, a speech writer for Fed Chair Jerome Powell, reveals “classified information” about how Powell deliberately acted to undermine President Trump and expand Fed activities far beyond its legislated monetary policy mission to encompass research on cherished Progressive issues. 

Hizmo reveals that Powell “hates” Trump and “wants to be remembered in history as. . . someone who held the line against . . . Trump.”  Indeed, Hizmo tells the reporter, many things cross Powell’s desk that he says “no” to simply because they are going to “jeopardize the legacy of the Fed or [Powell’s] legacy as the Chair.”  Hizmo also discloses that he does not work with any conservatives at the Fed and that he and his Fed colleagues believe conservatives and Trump supporters are “dumb.”  In Hizmo’s view, “The problem with Trump is that . . . Trump supporters are not voting for him for logical reasons.”  In addition, “Trump is just a crazy person . . . . [H]e’s a dumb guy.”  This is reflected in the Fed’s attitude toward the forthcoming Presidential election: “So the feeling is this: we don’t want Trump to be in the government. But if he comes, we’re still gonna try to do the best we can for the country.”  According to Hizmo, Powell and the Fed trying “to do the best for the country” was exemplified during Trump’s presidency when they countered Trump’s stripping away of regulations by imposing new regulations to “sit on top of the stuff [Trump] stripped.”

Hizmo also divulged that Powell, a long-time Republican, sought to enhance his legacy by pandering to the Progressive Left by unilaterally expanding the Fed’s mission: “Under Powell the Fed has changed to think about equity issues, racial issues, think about wealth inequality.” Powell also “creates an environment to foster research in [climate change], to foster discussion in the area where . . . it’s a friendly environment where we can hire climate scientists.”

In conclusion, Hizmo’s revelations should dispel any illusion about what Fed “independence” really means: the freedom of an unelected and imperious bureaucracy to manipulate or nullify democratic outcomes to further its own material and reputational interests and ideological agenda.